Equipment Leasing
CFPB Initially Proposed to Exclude MCAs, Factoring, and Equipment Leasing From Section 1071
December 17, 2020
After ten years of debate over when and how to roll out the CFPB’s mandate to collect data from small business lenders, the Bureau has initially proposed to exclude merchant cash advance providers, factors, and equipment leasing companies from the requirement, according to a recently published report.
The decision is not final. A panel of Small Entity Representatives (SERS) that consulted with the CFPB on the proposed rollout recommended that the “Bureau continue to explore the extent to which covering MCAs or other products, such as factoring, would further the statutory purposes of Section 1071, along with the benefits and costs of covering such products.”
The SERS included individuals from:
- AP Equipment Financing
- Artisans’ Bank
- Bippus State Bank
- CDC Small Business Finance
- City First Bank
- Floorplan Xpress LLC
- Fundation Group LLC
- Funding Circle
- Greenbox Capital
- Hope Credit Union
- InRoads Credit Union
- Kore Capital Corporation
- Lakota Funds
- MariSol Federal Credit Union
- Opportunity Fund
- Reading Co-Operative bank
- River City Federal Credit Union
- Security First Bank of North Dakota
- UT Federal Credit Union
- Virginia Community Capital
The panel discussed many issues including how elements of Section 1071 could inadvertently embarrass or deter borrowers from applying for business loans. That would run counter to the spirit of the law which aims to measure if there are disparities in the small business loan market for both women-owned and minority-owned businesses.
One potential snag that could complicate this endeavor is that the concept of gender has evolved since Dodd-Frank was passed in 2010. “One SER stated that the Bureau should consider revisiting the use of male and female as categories for sex because gender is not binary,” the CFPB report says.
But in any case, there was broad support for the applicants to self-report their own sex, race, and ethnicity, rather than to force loan underwriters to try and make those determinations on their own. The ironic twist, however, according to one SER, is that when applicants are asked to self-report this information on a business loan application, a high percentage refuse to answer the questions at all.
The CFPB will eventually roll the law out in some final fashion regardless. The full report can be viewed here.
Oakmont Capital Services Follows Top Talent to Minnesota
July 26, 2018
Yesterday, Oakmont Capital Services announced that it had hired 11 equipment finance veterans to staff its new office in Albany, Minnesota.
All of the new hires were previously working in the Equipment Finance division of Stearns Bank, a regional bank headquartered in Minnesota with retail bank locations throughout the state and in Arizona and Florida. Among banks with $2 to $10 billion in assets, Stearns Bank was named the top performing bank by American Banker for 2017 and 2018. The American Banker noted last year the bank’s expertise in equipment financing. Stearns Bank also received the number one ranking for top-performing community bank in the country from ICBA Independent Banker magazine in its May 2017 edition.
“I’m most excited about the depth of the knowledge base of the people we brought on,” said Founder of Oakmont, Joe Leonard, in reference to the new hires.
Leonard told deBanked that Oakmont was looking to expand all along, but the decision to locate its new office in Minnesota was largely based on the group of talent that became available from Stearns Bank. Leonard said there was management change at Stearns Bank, but that the bank still has a robust equipment finance team.
Oakland does equipment finance for the transportation, construction and medical industries, among others. It also provides working capital loans for business acquisitions, commercial real estate, debt consolidation, bridge Loans and export financing. Oakmont can make working capital loans from $300,000 to $20 million.
Leonard said that the bulk of Oakmont’s business is commercial equipment financing and SBA loans. And business is derived almost exclusively from referrals from equipment dealers and manufacturers.
The new hires include Daryn Lecy, who will serve as Vice President of Operations. He has experience helping to grow a portfolio from $140 million to $1.2 billion. He also has experience co-managing over 150 equipment finance employees. Lecy will be responsible for managing Oakmont’s new Minnesota office.
Jim Peach will be Vice President of Sales, Kayla Perling, Syndication Manager, Mikki Henkelman, Credit Manager, Tracey Elfering, Business Development Coordinator, and Jena Dirkes, Channel Development Officer. Chad Primus, Elise Linn, Jayme Gerads, Molly Sand and Michael McElroy will all serve as business development officers.
Founded in 1998, Oakland has its headquarters in West Chester, Pennsylvania. With the Minnesota office, it now employs roughly 40 people.
